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Volkswagen has reached a deal with the US authorities under which the automaker could offer to buy back up to 500,000 diesel cars in the US.

VW has also agreed a compensation fund for owners.

The German car giant is expected to reveal the deal to a Federal judge in San Francisco on April 21.

A VW spokeswoman, the Environmental Protection Agency (EPA) and the Justice Department declined to comment.

The company could also offer to repair diesel vehicles if US regulators approve a fix at a future date, reports said.

In March, US District Judge Charles Breyer gave VW until April 21 “to announce a concrete proposal for getting the polluting vehicles off the road.”

Judge Charles Breyer said in March the “proposal may include a vehicle buy back plan or a fix approved by the relevant regulators that allows the cars to remain on the road with certain modifications.”

In September 2015, the EPA found that VW cars being sold in the US had a “defeat device” – or software – in diesel engines that could detect when they were being tested, and change the performance to improve results.

Some models could be pumping out up to 40 times the legal limit of the pollutant nitrogen oxide.

In March, VW CEO Matthias Muller said that a deal with US authorities over its emissions scandal could take longer and cost more than expected.

Matthias Muller warned that the €6.7 billion set aside to cover the costs of the scandal might not be enough.

It said it would continue its investigation as well as talks with VW to find a suitable solution.

The head of the CARB, Mary Nichols, said: “Volkswagen made a decision to cheat on emissions tests and then tried to cover it up.

“They continued and compounded the lie and when they were caught they tried to deny it. The result is thousands of tons of nitrogen oxide that have harmed the health of Californians. They need to make it right.”

The federal Environmental Protection Agency (EPA) also said the VW plan for cars with 2 liter diesel engines was not acceptable.

The rejection comes ahead of a meeting between VW CEO Matthias Muller and EPA chief Gina McCarthy on January 13 to discuss the emissions scandal.

Volkswagen said in response: “Today’s announcement addresses the initial recall plans Volkswagen submitted to CARB in December. We are committed to working co-operatively with CARB and other regulators, and we plan to continue our discussions tomorrow when we meet with the EPA.”

The issue affects almost 600,000 cars in the United States and up to 11 million worldwide.

The scandal has severely damaged VW’s reputation and sparked investigations in several countries.

In the US alone VW is facing fines that could run into tens of billions of dollars.

The Department of Justice is suing Volkswagen on behalf of the EPA with a lawsuit that was filed on January 4 in a federal court in Detroit, Michigan.

The DoJ said the filing was the first step in “bringing Volkswagen to justice”.

Volkswagen has reported its first drop in VW brand sales in 11 years as the company continues to cope with its emissions scandal.

The VW brand sales fell 4.8% in 2015 to 5.82 million cars from 6.12 million a year earlier.

Falling demand in China and US added to the losses as orders fell in December.

VW has promised it will have a fix in the coming weeks for the millions of US cars with defeat devices that disguised emission levels in diesel cars.

Sales began declining after the emissions scandal came to light in September 2015. Deliveries fell 5.3% in October, 2.4% in November and 7.9% in December compared with those months the previous year.

The underperformance at VW’s largest division by sales and revenue pulled down annual group deliveries by 2% to 9.93 million cars, the first drop in 13 years, VW said.

Speaking on January 6, Volkswagen chief executive Herbert Diess said he was “optimistic” the company would find a solution soon.

“We will bring a package together which satisfies our customers first and foremost and then also the regulators,” he said.

Regulators appear been less confident. The Environmental Protection Agency (EPA) which uncovered the scandal, said on January 4 that VW had not yet “not produced an acceptable way forward”.

VW will meet the EPA in Washington next week to discuss its plan.

On January 4, the Department of Justice filed a lawsuit against VW for the use of the emissions devices, which involve computer software that can detect when cars are being tested.

The Connecticut Attorney General George Jepsen said on January 8 that the company was not cooperating with the investigation.

VW has been withholding corporate emails between executive related to the emissions scandal, using German law as the basis for the refusal.

“I find it frustrating that, despite public statements professing cooperation and an expressed desire to resolve the various investigations that it faces following its calculated deception, Volkswagen is, in fact, resisting cooperation by citing German law,” George Jepsen said in a statement.

In 2015, a record 17.47 million cars were sold, according to Autodata. The car data company has been keeping records since 1980.

General Motors, one of the biggest US automakers, had an 8% increase in sales.

Mercedes-Benz USA had its most successful year since entering the country, with sales rising 3.8%.

It also alleges that VW “violated” clean air laws by selling cars that were different in design from those originally cleared for sale by the EPA.

“With today’s filing, we take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution, setting us on a path to resolution,” said assistant administrator Cynthia Giles for the EPA’s Office of Enforcement and Compliance Assurance.

“So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”

The department said the filing was just the first step in “bringing Volkswagen to justice”.

VW is also facing separate criminal charges, and a raft of class-action lawsuits filed by car owners.

The EPA says that VW fitted many of its cars with a device that was able to recognize test conditions and adjust the engine settings accordingly, with the express purpose of giving distorted readings on nitrogen oxide emissions.

VW admitted to “totally screwing up”, and there has been a shake-up in the management structure and personnel as a result. Martin Winterkorn resigned as CEO and was replaced with Matthias Muller, the former boss of Porsche.

The company is currently conducting an internal investigation that it says will “leave no stone unturned”.

VW will begin recalling millions of cars worldwide soon, and has set aside €6.7 billion to cover costs. That resulted in the company posting its first quarterly loss for 15 years, of €2.5 billion in October 2015.

With the lawsuits piling up, experts say the final costs for VW are likely to be much higher than that.

In early September, VW admitted to the EPA that cars from the model years 2009 to 2015 contained software designed to cheat emissions tests.

It said that 11 million cars were affected.

That prompted US regulators to run further tests designed to detect such defeat devices and led to today’s announcement from the EPA.

“These tests have raised serious concerns about the presence of defeat devices on additional VW, Audi and Porsche vehicles. Today we are requiring VW Group to address these issues. This is a very serious public health matter,” Cynthia Giles said.

Regulators all over the world are now looking at VW’s diesel cars and the company is also facing criminal investigations.

State and federal prosecutors in the US have announced criminal investigations and German prosecutors are looking into the scandal.

VW CEO Martin Winterkorn resigned in late September as the scale of the scandal emerged.

At the time Martin Winterkorn said he was “not aware of any wrongdoing on my part” but was acting in the interest of the company.

Last month Volkswagen reported its first quarterly loss for at least 15 years after taking a big charge to cover the costs of the scandal.

VW said it had set aside €6.7 billion ($7.4 billion) to cover costs related to emissions cheating, which left it with a €2.52 billion pre-tax loss for the third quarter of the year.

Many analysts expect that VW will have to set aside more money to cover the recall of cars, penalties and lawsuits.

“Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” said Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance.

The illegal system allowed cars to detect when they were undergoing smog emission test and lowered the rate of pollution. Those emission controls were then turned off during ordinary use.

The state of California which assisted in the investigation has also issued a notice of violation to Volkswagen.

In 2014 the EPA fined Hyundai Motor and Kia Motors $300 million for misrepresenting the fuel economy in 1.2 million of their cars. That settlement is the highest to date.

Colorado’s Animas River turned mustard yellow as a toxic leak of wastewater is three times larger than officials had originally estimated.

The Environmental Protection Agency (EPA) now says that three million gallons of wastewater spilled from an abandoned mine last week.

The EPA does not believe wildlife is in significant danger because the sludge moved so quickly downstream.

Photo Durango Herald

Local authorities took steps to protect drinking water supplies and farms.

The spill began on August 5 when EPA workers, who were cleaning up the closed Gold King Mine, accidentally sent the toxic water flowing into a tributary of the Animas River.

The Animas River has been closed and local officials have advised people to stay out of the water.

The EPA is meeting with Colorado residents this week and testing local wells for contamination. More than 1,000 wells may have been contaminated.

“We’re going to continue to work until this is cleaned up and hold ourselves to the same standards that we would anyone that would have created this situation,” Shaun McGrath, an EPA official, told residents at one of the community meetings, according the New York Times.

Some residents derided the agency, calling it the “Environmental Pollution Agency”.

The EPA is still investigating the health effects of the leak, which included heavy metals including lead and arsenic.

The discolored water, which is now beginning to dissipate, stretched more than 100 miles into neighboring New Mexico.

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